Manuka forges ahead to gold production next quarter

Manuka Resources is constructing a fit-for-purpose processing and gold doré production facility at its 100% owned Mt Boppy gold mine

Previously ore from Mt Boppy had been hauled and processed at Manuka’s Wonawinta Silver Mine, 150km to the south

Relocation of a 400kW ball mill from Wonawinta to Mt Boppy is underway, while the company has bought equipment second hand to save further costs

Special Report: Manuka Resources’ plans to start low-capex gold operations at Mt Boppy next quarter are in full swing thanks to the relocation of a mill from the Wonawinta silver mine and the purchase of second-hand production equipment.

The latest steps in Manuka’s (ASX:MKR) strategy to bring the 100%-owned gold mine into production this year closely follow an $8 million capital raise led by Bell Potter and Shaw Capital Partners and supported by sophisticated investors.

Previously, ore from Mt Boppy had been hauled to and processed at Manuka’s Wonawinta, 150km south of the gold mine in the mineral-rich Cobar Basin.

The 400kW ball mill had mostly been surplus to requirements at Wonawinta following the installation of an 1800kW ball mill and suits the smaller plant capacity planned for Mt Boppy, aiding Manuka’s strategy for installing a low capex gold plant.

The on-site gold processing plant will also save more than $8 million per annum in opex and haulage.

Also aligning with the cost-conscious plans is the acquisition of a second-hand inline pressure jig and intensive leach reactor, which has resulted in material savings versus the original processing budget. The equipment is currently undergoing audit and refurbishment at Gekko Systems, the original equipment manufacturer.

Mr Boppy is an existing gold operation with a brownfields open pit, associated historic stockpiles, rock dumps and tailings.

Work done to date by Manuka put the latest resource, released in April this year, at 4.28 million tonnes at 1.19 grams per tonne of gold for 163,000oz of contained gold. Importantly, the measured and indicated resource categories now comprise 82% of the total.

Ready to earn

The update forecasts EBITDA of approximately $19 million per year across an initial five-year life.

Manuka’s base case production target at Mt Boppy is designed around an annualised feed rate of ~230,000tpa through the 400kW ball mill, with the first doré bars set to leave site in Q4 this calendar year.

However, the company is currently investigating opportunities to increase milling capacity and accelerate gold production.

Dennis Karp, Manuka’s executive chairman, said: “The execution of our plan to restart gold operations at Mt Boppy is well underway.

“The opportunistic purchasing of selected second-hand processing equipment is consistent with our low capex strategy that includes the leveraging and repurposing of existing assets including the Wonawinta 400kW ball mill, diesel generators, 48-man accommodation camp and mobile screening plant.”

The positive news from Manuka’s key Australian assets comes just two weeks after the 375% expansion of its Taranaki VTM (vanadiferous titanomagnetite) Project mining permit area in New Zealand. This has positioned Manuka as one of the largest emerging vanadium producers on the ASX.

This article was developed in collaboration with Manuka Resources, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.